The bank could launch as early as next spring and, if successful, could then expand. Discussions are at a very early stage and no landlord has yet made a firm commitment.

Under the scheme, led by consultancy Tribal, landlords would invest cash equity upfront into a fund that will generate interest payments. The plans were drawn up to combat tenants’ ongoing difficulties in getting mortgages and the continued reluctance of some lenders to expand the shared ownership market, worth an estimated £400 billion in England alone.

Brian Johnson, chief executive of 20,000-home landlord Moat, attend-ed discussions with Tribal and other associations on Monday. He said: ‘Anything that makes shared ownership more accessible has to be a good thing as the lack of availability of mortgage finance is increasingly an issue. But whether this model works for individual associations depends on what borrowing they have access to.’

Mr Johnson said Moat had yet to decide on its level of involvement.

The plan would see the associations use equity as security to borrow against, and lever in investment from banks, building societies and institutions. It is hoped an initial fund of £50 million could attract a further £125 million of investment, providing enough funding for 3,000 mortgages in the scheme’s initial phase.

It is hoped that the move would enable associations to benefit from scale and thereby reduce costs.

Simon Randall, a consultant for Winckworth Sherwood, is also advising on the scheme. He said: ‘It would encourage house building, [and] could therefore be important in getting shared ownership schemes off the ground.’

Mr Randall said two local authorities were also potentially interested in joining the scheme.

Once associations have decided whether to take part a steering group will be established to commission research into the specifics of the model.Paul Tennant, chief executive of Orbit, said: ‘It is important we change so that we are not always reliant on grant funding.’

Tony Quigley, director of home ownership at 30,000-home Sovereign Housing Group, said the association is considering ‘a number of options’ to improve mortgage access.